Greek optimism about imminent deal not justified: Schaeuble

Michelle Martin, Gernot Heller

3 Min Read

A man takes part in a anti-austerity pro-government demo in front of the parliament in Athens February 11, 2015. REUTERS/Yannis Behrakis

BERLIN (Reuters) - German Finance Minister Wolfgang Schaeuble told Reuters the Greek government’s optimism about clinching a cash-for-reforms deal with its lenders in days was not backed up by negotiations and he could not rule out Greece becoming insolvent.

Greek Prime Minister Alexis Tsipras’s leftist government hopes a deal with foreign lenders is imminent, with Finance Minister Yanis Varoufakis saying on Monday that an agreement could be reached within a week.

But Schaeuble poured cold water on this idea, saying reports from the international institutions involved in negotiations with Athens suggested talks were progressing “very hesitantly”.

“What I know from discussions with the three institutions does not back up the optimism arising from announcements from Athens,” Schaeuble said in an interview published on Thursday.

“There is not yet any substance to the mere announcement that we are closer to an agreement. This is still within the realms of atmosphere,” he added.

Greece’s European Union and IMF lenders say talks are moving too slowly for a deal in the coming days.

Asked whether he thought Greece was coming ever closer to insolvency, Schaeuble said the situation was in Athens’ hands, adding: “I can’t rule anything out in any case.”

In the latest warning that Greece is teetering on the brink of default, a senior Greek ruling party lawmaker said on Wednesday that Athens could not make an upcoming payment to the International Monetary Fund (IMF) on June 5 unless foreign lenders disbursed more aid.

Schaeuble said: “I can understand the public speculation about political solutions; but they are not justified by anything in their substance.”

Schaeuble said this would contradict an agreement between the Eurogroup of euro zone finance ministers and Greece on Feb. 20, when Athens was granted a four-month extension of its rescue package in return for promising economic reforms.

Schaeuble said Greece was likely to be discussed at the G7 meeting of finance ministers and central bank chiefs in Dresden next week although it was not officially on the agenda.